| Tue 23 Feb 2010, 7:05 | | WBO - Wilson Bayly Holmes - Ovcon Limited - Unaudited financial statements for |
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WBO
WBO
WBO - Wilson Bayly Holmes - Ovcon Limited - Unaudited financial statements for
the six months ended 31 December 2009
WILSON BAYLY HOLMES - OVCON LIMITED
Building and civil engineering contractors
(Registration no. 1982/011014/06)
ISIN No: ZAE 000009932 Share code: WBO
UNAUDITED FINANCIAL STATEMENTS for the six months ended 31 December 2009
HIGHLIGHTS
Operating profit up 23%
Headline earnings per share up 19%
CONDENSED INCOME STATEMENT
Unaudited Unaudited Audited
% December December June
increase 2009 2008 2009
R`000 R`000 R`000
Revenue 12,1 7 641 029 6 814 531 14 768 807
Operating profit 20,5 603 519 500 647 1 048 716
before non-trading
items
(Impairment)/reali (219) - 2 101
sation of goodwill
Fair value of 1 018 2 526 4 653
investments
Loss on disposal - (1 184) -
of investments
Share-based (6 545) (17 663) (22 974)
payments expense
Operating profit 23,4 597 773 484 326 1 032 496
Share of profits (23 243) 18 615 31 480
and losses in
associates
Investment income 140 399 139 171 328 704
Operating income 714 929 642 112 1 392 680
Finance costs (3 799) (23 986) (31 847)
Profit before 711 130 618 126 1 360 833
taxation
Taxation (210 765) (182 954) (398 033)
Profit for the 500 365 435 172 962 800
period
Profit
attributable to
Equity 460 492 392 768 889 928
shareholders of
Wilson Bayly
Holmes-Ovcon
Limited
Minority interests 39 873 42 404 72 872
500 365 435 172 962 800
Reconciliation of
headline earnings
Net profit 460 492 392 768 889 928
Adjustments:
219 - (2 101)
Impairment/(realis
ation) of goodwill
Share of - - -
impairment of
goodwill arising
within associate
Loss on disposal - 1 184 -
of investments
Profit on (741) (5 673) (5 330)
disposal of
property, plant
and equipment (net
of tax)
Headline earnings 18,5 459 970 388 279 882 497
Operating margin 7,9 7,3 7,1
(%)
Ordinary shares
Issued (`000) 66 000 66 000 66 000
Weighted average 54 787 54 956 54 787
number of shares
(`000)
Diluted weighted 54 973 55 118 54 973
average number of
shares (`000)
Earnings per share 17,6 840,5 714,7 1 624,3
(cents)
Diluted earnings 837,7 712,6 1 618,8
per share (cents)
Headline earnings 18,8 839,6 706,5 1 610,8
per share (cents)
Diluted headline 836,7 704,4 1 605,3
earnings per share
(cents)
Dividend per share 10,0 110,0 100,0 300,0
(cents)
CONDENSED BALANCE SHEET
ASSETS
Non-current assets 2 001 552 1 879 594 2 162 107
Property, plant and 1 089 060 1 143 317 1 113 672
equipment
Goodwill 277 642 161 843 206 261
Investment in associates 507 835 351 533 428 502
Other non-current assets 127 015 222 901 413 672
Current assets 6 386 936 6 369 968 7 445 721
Cash and cash equivalents 4 064 134 3 342 105 4 033 309
Other current assets 2 322 802 3 027 863 3 412 412
Total assets 8 388 488 8 249 562 9 607 828
EQUITY AND LIABILITIES
Capital and reserves 2 820 001 2 100 418 2 579 993
Ordinary share capital and 2 692 169 2 023 980 2 384 550
reserves
Minority interests 127 832 76 438 195 443
Non-current liabilities 208 852 217 542 376 887
Long-term financial 8 393 110 428 21 768
liabilities
Other non-current 200 459 107 114 355 119
liabilities
Current liabilities 5 359 635 5 931 602 6 650 948
Bank overdrafts - 19 528 1 046
Other current liabilities 5 359 635 5 912 074 6 649 902
Total equity and liabilities 8 388 488 8 249 562 9 607 828
Net tangible asset value per 4 407 3 388 3 976
share (cents)
CONDENSED STATEMENT OF CHANGES IN EQUITY
Ordinary share capital and 2 384 550 1 731 904 1 731 904
reserves at the beginning of
the period
Net profit for the period 460 492 392 768 889 928
Translation of foreign (30 986) (6 989) (61 002)
entities
Share-based payments expense 6 545 17 663 22 974
Dividend paid (128 432) (111 366) (172 589)
Purchase of treasury shares - - (6 359)
Change in shareholding of - - (20 306)
subsidiaries
Ordinary share capital and 2 692 169 2 023 980 2 384 550
reserves at the end of the
period
CONDENSED CASH FLOW STATEMENT
Cash generated from 691 077 1 199 668 2 287 500
operations
Investment income 140 399 139 171 328 704
Finance costs (3 799) (23 986) (31 847)
Taxation paid (390 962) (301 267) (527 739)
Dividend paid (128 432) (111 366) (172 589)
Cash retained from 308 283 902 220 1 884 029
operations
Net cash flow from investing (263 037) (285 656) (505 434)
activities
Net cash flow from financing (13 375) (70 911) (123 256)
activities
Net increase in cash and 31 871 545 653 1 255 339
cash equivalents
Cash and cash equivalents at 4 032 263 2 776 924 2 776 924
the beginning of the period
Cash and cash equivalents at 4 064 134 3 322 577 4 032 263
the end of the period
SEGMENTAL INFORMATION
Primary segments
Segment revenue
- Building and civil 5 478 110 4 727 521 10 256 984
engineering
- Roads and earthworks 2 148 458 2 072 702 4 481 874
- Property 14 461 14 308 29 949
7 641 029 6 814 531 14 768 807
Segment result
- Building and civil 308 974 235 817 449 446
engineering
- Roads and earthworks 290 795 264 156 597 578
- Property 3 750 674 1 692
603 519 500 647 1 048 716
Secondary segments
Segment revenue
- Local 4 620 889 4 066 010 8 749 611
- International 3 020 140 2 748 521 6 019 196
7 641 029 6 814 531 14 768 807
Segment result
- Local 332 755 249 067 555 008
- International 270 764 251 580 493 708
603 519 500 647 1 048 716
BASIS OF ACCOUNTING
The consolidated interim unaudited financial statements have been prepared in
accordance with IAS 34: Interim Financial Reporting, the International Financial
Reporting Standards (IFRS) and Schedule 4 of the Companies Act. The accounting
policies adopted in the preparation of these financial statements are consistent
with those used to prepare the comparative interim financial statements and the
annual financial statements for the year ended 30 June 2009.
COMMENTARY
Overview of results
The group is pleased to report that it has produced a solid set of results in
line with the trading statement published on 10 February 2010. Headline earnings
increased by 18,5% to R460 million (2008: R388 million) while earnings per share
have improved by 17,6% over the comparative period. Revenue for the period
increased by 12,1% to R7,6 billion (2008: R6,8 billion) and operating profit
before non-trading items increased by 20,5% to R604 million (2008: R501
million). The group achieved an operating margin of 7,9% for the six months
under review (2008: 7,3%).
The group balance sheet remains strong with a net cash position of R4,1 billion
(2008: R3,3 billion). To date the group has spent R87 million of the R244
million capital expenditure approved.
In October 2009 the group increased its stake in Probuild Constructions (Aust)
Pty Limited (Probuild) from 62,6% to 69,4%. The transaction resulted in an
increase in goodwill of R61 million.
Financial guarantees issued to third parties amount to R3,3 billion compared to
R3,6 billion as at 30 June 2009.
We are proud to have been part of the handover of three stadia for the 2010
World Cup six months ahead of the event. This is a tribute to the capability of
the South African construction industry.
An interim dividend of 110 cents per ordinary share has been declared (2008: 100
cents per share).
BUILDING AND CIVIL ENGINEERING
The division has had a successful six months increasing both revenue and profit.
Operating profit achieved for the period amounts to R309 million (2008: R236
million) an increase of 31%. The operating margin increased from 4,4% at June
2009 to 5,6% for the period under review. At the outset of 2010 the division has
an order book of R9,9 billion (June 2009: R11,5 billion).
South Africa
The North division successfully completed and handed over both the Peter Mokaba
Stadium in Polokwane and the Norwood shopping centre in Johannesburg. Work
continues on large mixed-use developments namely the Zone in Rosebank, One Monte
at Montecasino, 1 Station Place in Sandton and Lynnwood Junction in Tshwane.
Construction has also commenced on a number of shopping centres; Phase 1 of the
Sandton City upgrade, the Woodlands and Kolonade shopping centres in Tshwane and
the extension to the Clearwater Mall in Johannesburg.
A decrease in building activity has adversely affected the Western Cape region.
The Cape division has however redeployed certain resources to Zambia for the
construction of the Manda Hill Shopping Centre in Lusaka while other resources
were redeployed in Gauteng to assist the North division on various projects. The
Greenpoint stadium was completed on time and handed over to the Cape Town
municipality at a ceremony held in December 2009. Construction continues on the
Ben Schoeman harbour with the award of an additional contract and work has
commenced on the De Ville shopping centre.
While the Eastern Cape region is experiencing difficulty in finding replacement
work, construction is progressing well on the Livingstone Hospital for the
provincial government, the General Motors warehouse for the Coega Development
Corporation and a number of smaller contracts for private clients.
In KwaZulu-Natal, construction of the King Shaka International Airport is
entering the final stages with a completion deadline of May 2010. The Moses
Mabhida stadium was also completed and successfully handed over during the
period. The region is further engaged in construction work on the Investec
Regional Head Office in Durban, a refurbishment of the Wild Coast Sun and a
boutique hotel for Peermont at its casino in Empangeni.
The Civil division has had a steady six months and following a recent increase
in tendering activity the outlook for the division is positive. Work on the
Kusile power station has been hampered by inclement weather but is progressing
well nonetheless. The division is further involved on various projects for
Sasol, Anglo Coal and Impala Platinum whilst also assisting other divisions with
civil works on shopping centres and earthworks contracts.
Australia
Probuild has experienced reasonable growth in revenue and profit when compared
to the first six months of last year. The majority of the work is in Melbourne
where the following developments; 717 Bourke Street, Myer Redevelopment and
Northland Stage 20 are progressing well. In Perth, 140 William Street is on
schedule. Sydney remains quiet, however the order book for Australia is
satisfactory. The roads business in Brisbane and the civil business in Perth
have performed to budget.
ROADS AND EARTHWORKS
The Roads and Earthworks division has again produced commendable results
achieving an operating profit of R291 million (2008: R264 million). The margin
has increased to 13,5% (2008: 12,7%) for the period. The order book stands at
R3,2 billion (June 2009: R4,5 billion). Projects on offer have slowed and
conditions are competitive. The division is aggressively seeking additional work
both locally and in the rest of Africa.
In the North division we continue with the Ingula Dam project for Eskom. The
Gauteng Freeway Improvement project is progressing well and remains ahead of
programme despite the heavy rainfall experienced. The region has secured a
contract for Goldfields at its South Deep mine near the Western Areas District
and work has commenced.
The Central division continues with ongoing mining infrastructure work in the
Mpumalanga area.
In the Coastal division the extremely tight schedule of the civils package for
the King Shaka International Airport remains a priority. Work continues on the
AC waterline replacement project in eThekwini.
The International divisions continue with mining work in Botswana, Ghana,
Zimbabwe and Zambia. Work continues on the extension of the runway at the Sir
Seretse Khama International Airport in Gaborone, Botswana.
Subsidiaries
Edwin Construction (Pty) Limited has increased turnover as a result of the
provincial roads programme.
Insitu Pipelines (Pty) Limited has also been busy and has experienced
significant growth in revenue and profit for the six months under review.
PROPERTY
The real estate market remains depressed. However sales at the Simbithi Eco-
Estate development near Ballito in KZN have been steady despite the poor market
conditions.
INDUSTRIAL
Capital Africa Steel (Pty) Limited, an associate of the group active in the
steel industry and with ready-mix and quarrying operations has had a
disappointing six months, posting an overall loss for the period. Despite the
successful commissioning of the ERW pipe factory in Maputo, the slow global
recovery in demand for pipe has been the main contributing factor towards the
underperformance.
PROSPECTS
Globally there are signs that the recession is ending and that the economy is
recovering as commodity prices move upward. In South Africa business confidence
is low and there is speculation that the rate of recovery will be slower than
that of the USA and Europe. We have experienced a slowdown in the number of
contracts awarded even though there has been a reasonable pipeline of work.
The group has been successful in negotiating a number of building contracts
based primarily on our client relationships and track record. We are encouraged
that the budget speech indicated that there is still R846 billion available for
infrastructure work.
Australia has to a large extent escaped the global financial crisis, as a result
work prospects remain promising. We are tendering for work in the United Arab
Emirates from our offices in Abu Dhabi and Qatar. Work in the region is
competitive.
The order book at the beginning of 2010 is R13,1 billion compared to R15,3
billion at 30 June 2009.
We remain cautious for the next two financial years, but believe that the group
is well positioned to cope with the difficult environment we anticipate.
DIVIDEND DECLARATION
Notice is hereby given that the directors have declared an interim dividend of
110 cents per share (2008: 100 cents) payable in respect of the six months ended
31 December 2009.
The following dates have reference:
Last day to trade cum dividend Friday, 9 April 2010
Trading ex dividend commences Monday, 12 April 2010
Record date Friday, 16 April 2010
Payment date Monday, 19 April 2010
Shares may not be dematerialised or rematerialised between Monday, 12 April 2010
and Friday, 16 April 2010, both dates inclusive.
By order of the board
MS Wylie EL Nel
Chairman Chief Executive Officer
www.wbho.co.za
23 February 2010
Sponsor Investec Bank Limited
Date: 23/02/2010 07:05:04 Produced by the JSE SENS Department.
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